Real estate in Mexico
How does one purchase property in Yucatan? It is possible for foreigners to legally own property in México. For properties located outside the restricted zone – that is, 100 km from any border, or 50 km from any coast – one may own the property fee simple. In general, this gives one virtually the same rights as property ownership does in Europe, the United States, and Canada.
Mérida and many parts of the Yucatán are located within this restricted zone. To acquire property in the restricted zone one must either engage a Mexican bank to execute and hold title to the property for the buyer using an instrument known as a "fideicomiso (fee-day-co-ME-so) trust", or create a "foreign-owned Mexican corporation."
The fideicomiso trust creates a trust agreement for the benefit of the foreign buyer, and the bank takes on a fiduciary obligation to the owner. The owner retains all the benefits of ownership and has the legal right to lease the property, sell the property, and will the property to their heirs.
The one-time cost for establishing a fideicomiso is currently around US$2600. There is also an annual bank fee for the maintenance of the trust. The annual fee is based upon a percentage of the value of the home. There is little consistency with regard to what banks charge for this fee, so it is a good idea to shop around. A home in the US$100,000. range will have a yearly fee of approximately US$600. per year.
Fideicomiso trusts are currently 50-year documents. They can be renewed at the end of the 50-year term for an additional 50 years. There is no limit to the number of times the fideicomiso trust can be renewed. The renewal fee is currently approximately US$900.
One may also own property as a Foreign-Owned Mexican Corporation. The initial cost to create the corporation is about US$1500. You will need to incorporate under the laws of México, which require that you report your corporate earnings monthly through an accountant (accountant fees are currently between US$100. and US$200. per month depending on your number of employees). Additionally, the principal officer of the corporation is required to have an FM-3 Visa. You can apply for this visa yourself at the Mérida immigration office, or an attorney can be engaged to handle the process, charging about US$400 to do so.
If it is your intention to own more than one property or to run a commercial enterprise (bed & breakfast, guesthouse or hotel), the chances are great that incorporation will be the right avenue. Additionally, if the property to be purchased measures more than 2000 square meters, incorporation will probably be the way to go. Current law does not allow fideicomiso trusts for properties larger than 2000 square meters. If more information is desired about any of this, please contact us and we can direct you to the correct attorney or notario.
In general, all purchases of personal real estate in Yucatan are done in cash.
Financing is becoming more available and as information becomes available we will provide it.